As work on the budget continues, Madison County School Board members are evaluating moving to a self-insured insurance model.

Currently, the school division has insurance through Local Choice which is a partially self-insured plan. Essentially, benefits are packaged and delivered as one of five plans. However, the board discussed the option of moving to a Captive self-insured plan which would unbundle the benefits to allow for each individual piece to be bid out in the market, thus creating savings.

According to Elite Captive Strategies Captive Advisor Chuck Clement, approximately five years ago, Buena Vista City Public Schools moved from Local Choice to Captive. In 2017, the Virginia School Board Association (VSBA) endorsed the insurance model and seven school districts have since signed on.

Clement said the major difference between Local Choice and Captive is that the latter allows for transparency.

“You see where money is allocated and where the profits are,” he said. “Right now, you can’t see those.”

He said any savings are currently going to the insurance company. With Captive, those savings would be collected by the participating school divisions into a collective “bucket” to be used to pay for large claims. Any profit would then go back to the individual school systems which could then be used for operational costs.

School board member Nita Collier who is employed by Albemarle schools, said when the bucket became large enough, Albemarle employees received bonuses. Albermarle uses a plan similar to Captive, but it isn’t operated by Captive.

There’s also a wellness component to the Captive plan in which employees can earn points to reduce their deductible up to $750. One point equals $1.

Superintendent Anna Graham was previously employed by Buena Vista City Schools so she has experience with the Captive plan.

“The wellness program was excellent,” she said. “There were fun incentives to get healthy.”

Captive is part of the Cigna network, so employees would be switching from Anthem. However, Clement said most doctors are in the Cigna network, especially due to the close proximity to Charlottesville which he said has great interaction in the network. Similar to Anthem, Cigna negotiates discounts. Captive has the same dental plan as school employees currently have so there would be no change in dental coverage.

Clement said he expects five more school systems to join the Captive program before Oct. 20.

Local choice for the Madison School System runs Oct. 1 – Sept. 30. Captive runs July 1 – June 30 so should the school system join the program, it would have a partial year with Local Choice followed by six months with Captive. The rate will be the same as Captive will match Local Choice. However, the insurance renewal rate has not come back yet for Local Choice.

“If Local Choice comes back with a zero increase, [it could be] a good time to move because that means we’re healthy,” Graham said.

Madison County Public Schools Director of Finance Tina Cropp said if the rate comes back with an increase and the division opts not to switch plans, the budget will need to be increased.

“If everyone gets the same coverages and [we] get money back, that’s a win-win for everyone,” school board member Arthur Greene, Jr. said.

“It’s been nothing but a good experience as an employee,” Collier said.

The school board is waiting on its renewal rate from Local Choice before making a decision.

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